Biden Extends Student Loan Payment Pause While Debt Relief Plan Stays On Hold
The Biden administration announced Tuesday that it would extend the repayment pause on federal student loans as President Joe Biden’s debt cancellation plan remains blocked in court.
The payment pause, which was previously scheduled to expire in January, will be extended until June 30 or until the dispute is resolved, whichever comes first. If the dispute has not been resolved by June 30, payments will resume 60 days later.
“I am completely confident that my plan is legal,” Biden said in a video ad. “But it’s not fair to ask tens of millions of relief-eligible borrowers to resume payments on their student debt while the courts consider the lawsuit.”
Biden announced in August that he would cancel up to $20,000 in debt per eligible borrower, but the move was quickly met with legal challenges.
The Biden administration last week asked the Supreme Court to reinstate the loan forgiveness plan after a federal appeals court blocked it.
Biden said the new June 30 deadline to resume student loan payments would give the Supreme Court enough time to hear the case.
Federal student loan holders have not been required to make payments since March 2020, when President Donald Trump signed the CARES Act, which halted payments until September 2020 and halted interest accrual to ease the economic impact of the coronavirus pandemic. coronavirus.
Trump subsequently took executive action to extend the postponement period to January 2021. Biden has issued six more extensions since taking office.
The moratorium does not apply to borrowers with privately owned loans.
About 45 million people in the US have student debt. the Federal Reserve estimated that in the third quarter of 2022, people owed more than $1.7 trillion in student loans.
The Biden administration has expressed confidence that it will prevail in court, but officials have not been able to say what other policies the White House will follow to alleviate student debt should the courts reject Biden’s cancellation plan.